POPULISM: THE PHENOMENON

Ray Dalio

Bridgewater Associates, Westport, CT., March, 22, 2017, 61 Pgs., graphs

Reviewer comment
This is an excellent historical look on the origins and developments of populist movements, with focus on the current examples. However, the author considers them to be too current for analysis because they are still active and the full extent of their activities is yet to come. His idea is to compile in detail the history of the rise, development and full career of his prototype populists and from that create his archetype against he can compare the current examples. Using analysis of historical examples of his subject to create these archetypes is his usual method - for instance in his book on Big Debt Crises. He limits his list of examples to the 20th century except for two Americans, Andrew Jackson and William J. Bryan.

In 2018 Victor Davis Hanson wrote a different conception of the current populist phenomena based on his knowledge as an historian of ancient history - "Dueling Populisms" - which was published in the Hoover Institution Journal's Defining Ideas series.

Introduction
Mr. Dalio comments that the nature of populism is not well understood by many today because it has been relatively rare recently. It has been seen in some 'emerging' countries such as Venezuela and Philippines but not in developed countries. However, in the last years it has emerged as a 'major force'. In order to make comparisons, he states that he has developed one of his favorite tools for analysis, a archetypical template based on assembling a representative group of specific, relative examples from the historical record. With this he created a 'index' of 'the share of votes received by populist / anti-establishment parties or candidates in national elections, for all the major developed countries back to 1900'. This is based on the share of votes made by voters attacking the political/economic establishment.
Developed World Populism Index This graph depicts the huge increase in the level of Dalio's 'world populism index both in the 1930's and again in the years close to 2010. From this he expects that populism will have a greater impact on economic policies - more important than classical fiscal and monetary policies and international relations as well.

The Archetypical Populist Template
The author describes his template: "Populism is a political phenomenon that arises from the common man being fed up with
1) wealth and opportunity gaps,
2) perceived cultural threats from those with different values in the country and from outsiders,
3) the 'establishments' in positions of power, and
4) government not working effectively for them."
In summary, he writes: "populism is a rebellion of the common man against the elites and to some extent against the system."
He advises that the "most important thing to watch is how the conflict is handled"
He identifies the most important populist economic policies are: "protectionism, nationalism, inreased infrastructure building, increased military spending, greater budget deficits, and quite often, capital controls."

Characteristics of Populists from 1930's/Interwar Period
Mr. Dalio presents two tables in which his representative populists are listed against 10 significant variables. He considers these 18 to be: 5 far left: 4 center-left: 7 far right: and 1 center-right - or about evenly divided left and right.

The following are 14 of the 18 individuals he includes in his table of characteristics. As he notes, the descriptions for these are both too long and too short - too long because they are likely more than the average reader will read, but too short because they are 'inadequate' to provide the full information needed for full appreciation of their careers. Even so, the sections on the Americans do provide excellent summaries of the economic and political conditions that underlay historical events. As such, they are valuable additions to the study of general Amerian history.

The Populists of the Interwar Period (1920-30s)
His major point in this discussion is to note that it was a period of 'global debt crisis' and depression. He cites some economic simalarites and difference between then and now. He lists 4 characterists of that era which he considers significant.
1 weak economic conditions;
2 uneven recovery in which the elite was believed to be prospering excessively;
3 political argument and weak policy making;
4 a perception by the common people that foreigners were threatening fundamental social values.
He lists 6 general political ideologies they shared.

1. The US: FDR, Huey Long, and Father Coughlin
In this extensive section Mr. Dalio discusses the economic background in which the three lived and worked and he provides 11 enlightening graphs each depicting relevant economic or social trends.

Franklin D. Roosevelt - page 8
Rise to Power
Key Policies
Populism related quotes
US Asset Markets in the 1920's and 1930's

Huey Long, a US Crusader against the Wealthy and Big Corporations - page 11
Rise to Prominence
Populism related quotes

Father Charles Coughlin, an American Who Espoused Fascist Views - page 12
Populism related quotes

Core Europe: Italy/Mussolini, Germany/Hitler, Spain/Franco

2. Italy: Benito Mussolini - page 13
Economic Political Background
Rise to Power
Key Policies
The Economy, Assets and Wealth
Populism related quotes
Italy: Economic Conditions in the 1920's and 1930's
Italy: Asset Markets in the 1920's and 1930's

3. Germany: Adoph Hitler - page 18
Economic Political Background
Hitler's Rise to Power
The Economy,Asset Markets and Wealth
Populism related quotes
Germany: Asset Markets in the 1920's and 1930's

4.Spain, the Spanish Civil War, and Rise of Francisco Franco - page 24
Economic Political Background
The Nationalists and Franco's Rise to Power
Key Policies
The Economy, Asset Markets and Wealth
Franco Period
Spain: Assset Markets in the 1920's and 1930's

5. UK: Oswald Mosley, a British Fascist - page 28
Economic Political Background
Rise to Prominence
Key Positions
Populism related quotes
UK: Asset Markets in the1920's and 1930's

6. Japan and the ise of Military Rule - page 31
Economic Political Background
Military's Rise to Power
Key Policies
The Economy: Asset Markets and Wealth
Japan Asset Markets in the 1920's and 1930's

7. Other Historical Cases of Populism

US 1830's: Andrew Jackson - page 35
Economic Political Background
Rise to Power
Key Policies
Nulification Crisis and Tariffs
Economic Policies and Opposition to the Second Bank
Populism related quotes

US 1890's: William Jennings Bryan - page 38
Economic Political Background
Rise to Prominence
Key Policies
Populism related quotes

Russia 1910-1920's: Vladimir Lenin and the Russian Revolution - page 42
Economic Political Background
Rise to Power
Economic Policies and Impact on Assets and Wealth
Russia: Asset Markets in the Early 1900's

Argentina: Juan Peron - page 45
Economic Political Background
Rise to Power
Key Policies
The Economy, Asset Markets and Wealth
Populism related quotes

Pierre Poujade - page 50
Economic Political Background
Rise to Prominence
Key Positions
The Economy, Asset Markets and Wealth
Populism related quotes

Robert Muldoon - page 52
Economic Political Background
Rise to Power
Key Policies
The Economy, Asset Markets and Wealth
Populism related quotes

Hugo Chavez - page 56
Economic Political Background
Rise to Power
Key Policies
The Economy, Asset Markets and Wealth
Populism related quotes